Which of the following is an example of a macroeconomic aggregate? A) Total fixed cost faced by a firm B) Income earned by a household C) Profit earned by an entrepreneur D) The annual inflation rate ANSWER D
Date: September 2nd, 2020
Define subsistence level. What happens if the income in an economy exceeds the subsistence level in Malthus cycle? What will be an ideal response? ANSWER The subsistence level is the minimum level of income per person that is generally necessary for the individual to obtain enough calories, clothing, and shelter to survive. If the […]
Date: September 2nd, 2020
The horizontal short-run aggregate supply curve A) assumes that wages and all other input prices are constant. B) assumes that opportunity cost is constant. C) shows that real GDP can be increased only when prices increase. D) assumes that there is full employment in the economy. ANSWER A
Date: September 2nd, 2020
Which of the following statements is true? A) An increase in the nominal wage rate leads to a decrease in the real wage rate if the price level is stable. B) In an economy which has a positive inflation rate, the real wage rate is always greater than the nominal wage rate. C) An increase […]
Date: September 2nd, 2020
A fall in the long-run real interest rates leads to a ________. A) leftward shift of the labor supply curve B) leftward shift of the labor demand curve C) rightward shift of the labor supply curve D) rightward shift of the labor demand curve ANSWER D
Date: September 2nd, 2020
Which of the following statements identifies a difference between correlation and causation? A) Correlation occurs when one thing directly affects another, whereas causation implies a mutual relationship between two things. B) Causation cannot arise when correlation is present, and correlation cannot arise when causation is present. C) Correlation implies a mutual relationship between two things, […]
Date: September 2nd, 2020
Suppose the government decides that a particular commodity is a luxury and decides to fix its price above the market-determined price. What implications could this policy have? What will be an ideal response? ANSWER If the government fixes the price of a commodity above the market-determined price, it will provide an incentive to sellers […]
Date: September 2nd, 2020
Refer to the above table. The table gives the combinations of real disposable income and real consumption for a college student for a year. What is the value of the marginal propensity to consume? A) 0.7 B) 1 C) 0.3 D) 0 ANSWER A
Date: September 2nd, 2020
Which of the following is a correct reason for stating that the United States has a fiduciary monetary system? I. Our money is convertible to a fixed amount of silver or gold. II. Our money has a predictable value. A) I only B) II only C) Both I and II D) Neither I nor II […]
Date: September 2nd, 2020
Actions on the part of monetary and fiscal policy makers that are undertaken in response to some change in the overall economy are known as A) creative policy making. B) passive policy making. C) active policy making. D) nondiscretionary policy making. ANSWER C
Date: September 2nd, 2020
